The Key to True Innovation

Innovation is a word often bounced around the business
world. From advertisements to CVs this buzzword is everywhere. This being said understanding
what innovation actually means to business is very important concept. Innovations
change the landscapes of both the public and private spheres. In business terms
it can be defined as taking an invention and commercialising it. This invention
does not have to be physical product or item but could be process invention
such as the factory line. Therefore, in order to succeed, companies need
acquire the right people that are equipped to manage innovations. Mario
Kafourors a lecture at Manchester University and a previous fellow at the
University of Leeds has written extensive literature on innovation. The basis
of his work concludes that companies who innovate regularly enhance their
competitive advantages globally, while those who stick to their traditional
methods of revenue creation normally become stagnant.

Innovations are split into either radical or incremental in
nature. Innovations can change or destroy a business processes, product or strategy.
For instance, the smartphone has had a profound effect on us as people when
interacting socially or when trying to find out what the Kardashian’s are up to…
However, it has also radically changed the business of telecommunication with
companies like Nokia or Motorola falling short to the new comers of Samsung and
Apple. Radical innovations make old functions or products obsolete just as
smart phones made landline and older mobile phones out dated. For example, the
constant changing of components from each new generation of smartphone
perfectly highlights incremental innovations. Incremental innovations are thus gradual
change of a product or processes.

Innovation can also refer to how a company increases its
knowledge base and how it undertakes radical or incremental innovations. When
conducting research and development companies operate under open or closed
innovation. In other words, does the company rely on ideas or knowledge from
external or internal sources when pursuing new innovations to increase their
competitive advantage? There is no correct formula for this, the key is to not
to rely exclusively on one or the other as the saying goes; ‘don’t put all your
eggs in one basket’.

Innovation is clearly extremely relevant to business. Now what
are the next radical innovations that are coming to fruition and have the
potential to change businesses everywhere? Many look at Artificial Intelligence
and Blockchain as the innovations of the future. One search on the Financial
Times will find hundreds of articles on both these subjects but both of these
are still on the periphery of businesses and have not been completely embraced
at corporate level. They however, seem poised to disrupt traditional businesses
from finance to supply-line management. Research on these subjects is highly
sort after, and thus provides opportunities for students who investigate them
stand out when applying for jobs. So, the next time you hear the word being
used in flippant comments it may be worth thinking why it’s there.